A week and a half ago, Brandon and I took a few days away from the lounge and made a trip out to Las Vegas for the Tobacco Plus Expo, the second-largest tobacco-related trade show in the USA. Unlike the Premium Cigar Association Tradeshow (PCA) later this year, this trade show is more than just cigars and involves everything a smoke shop could need to sell, including automatic floor vacuums, cigars, and even fake mushroom gummies. While a large portion of the show involved products we do not sell at Renegade, the cigar side of the show is definitely growing, and TPE has become an important opportunity for both manufacturers and retailers alike. Here are some of my thoughts from the few days we spent at the show.
Alec Bradley sells for millions:
The big talk of the show was the closing of a $72.5 million deal for Scandinavian Tobacco Group (STG) to purchase the Alec Bradley brand. While it is not unique for brands to be acquired, usually it adds capacity (because the brands own their own factories) as well as blends. However, Alec Bradley does not manufacture their own cigars, choosing instead to work with several factories to manufacture them. Not only was the deal unique in this way, but this deal was at a particularly high evaluation as well. STG has been on a spending spree lately - STG also purchased Room101 just a few months ago.
There weren't a lot of new cigars:
Last year at TPE, several new cigars were released, which was not the case this year. I believe the only new release we ordered at the show was the Rojas Breakfast Taco package. Most of the manufacturers we do business with did not have any new releases, choosing instead to release new cigars at PCA later this year. We didn't bring in any new brands either, sticking with the manufacturers we currently already sell. However, we did bring in some new blends, so check in over the next couple of weeks to see what we added!
The cigar industry is about relationships:
I mentioned it to one of the reps I was grabbing a drink with after the show - the cigar industry gets more and more fun the longer you are in it. I'm almost 3 years into the industry now personally, and it was great to catch up with people I don't see often enough. A room full of cigar industry people makes for great conversation. Just like friendships at the lounge, the industry was built on the relationships between manufacturers and retailers. Spending a few hours outside of the lounge at the bar goes a long way to develop those relationships. While I'm biased because I come from a trade show background, I think it is important to show face and be present at trade shows.
TPE makes way more sense for manufacturers than it does for most cigar retailers:
If you are a small shop and only sell cigars, unfortunately, I'm not sure it makes pure financial sense for shops to attend. At a bare minimum, I think you are looking at spending around 5k to make the trip for 2 people to attend Vegas. With the most aggressive deals essentially offering 5% in free product, this means shops would have to spend $100,000 to break even (which most shops simply do not do).
On the flip side of things, TPE is significantly cheaper for manufacturers to attend than PCA later in the year. Booths could be bought for as little as $3,000, which included furnishings. This means that a manufacturer could literally walk in with their cigars, book a single hotel room for an employee and do the entire trade show for under $8,000. A single purchase order could cover the cost to attend! This was a major reason why the cigar section had both larger booths and more manufacturers present than last year.
Overall, I still believe it was worth our time to attend TPE. We purchased enough cigars, made enough connections, and benefited from having our hotel room comped since we were a part of TPE's Hosted Buyer program.
Big Questions for Next Year
There are some questions about what TPE will be like next year as it relates to the cigar industry. As I mentioned previously, TPE represents a good opportunity to stock up on cigars. This year (and in years past), TPE is about five months away from the other trade show PCA, which gives plenty of time to sell off inventory purchased at the show. However, next year PCA is potentially moving only a few weeks away from TPE. This means retailers won't have as much time to move inventory and will have less of a reason to stock up. Will as many cigar shops visit? Will as many cigar manufacturers have booths? My money says no.